SQUARE INSURANCE BROKERS PRIVATE LIMITED vs. INCOME TAX OFFICER OF INCOME TAX DEPARTMENT ITO WD 1(1)

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CW/13122/2025HC RajasthanRJHC02073217202501 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA2 pages
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What did the High Court hold?

The Tribunal quashed and set aside the notice dated June 27, 2025, issued under Section 148 of the Income Tax Act, 1961. This decision was based on the High Court's established position in cases like Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd., which held that notices issued by JAOs instead of FAOs are invalid. However, the Court granted liberty to the Revenue to revive the notice if the Apex Court were to overturn these precedents in the pending SLP concerning Hexaware Technologies Ltd. The petitioner reserved its right to raise other grounds at an appropriate stage. The Court also noted that any re-assessment order passed pursuant to the quashed notice would also stand quashed and set aside. All other rights and contentions of the parties were kept open.

What were the facts?

The petitioner, Square Insurance Brokers Private Limited, challenged a notice dated June 27, 2025, issued under Section 148 of the Income Tax Act, 1961. The challenge was based on the assertion that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO). The respondent, Income Tax Officer, Ward 1(1), Jaipur, appeared before the High Court. The procedural history involves the filing of a writ petition before the High Court of Judicature for Rajasthan, Bench at Jaipur.

What were the issues?

1. Whether a notice dated June 27, 2025, issued under Section 148 of the Income Tax Act, 1961, is invalid if issued by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO)? (Question of law) The petitioner contended that such a notice is bad in law and invalid, relying on the High Court's judgments in Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others, Sharda Devi Chhajer Vs. The Income Tax Officer & Another, and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax. The revenue, while agreeing that one ground was covered by precedent, stated that a Special Leave Petition (SLP) had been filed in the Hexaware Technologies Ltd. case, and notice had been issued. The revenue sought liberty to revive the notice if the Apex Court were to interfere with the aforementioned judgments.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:34962-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 13122/2025 Square Insurance Brokers Private Limited, 506, 5Th Floor, Trimurty V-Jai City Point Ahinsa Circle, C-Scheme, Jaipur G.p.o. Jaipur 302001, Rajasthan- Through Rakesh Kumar S/o Padma Ram, Plot No. 74A, Block-A, Narayan Vihar A, Asarpura, Sanganer, Near Buniyad School, Gopalpura By-Pass, Narayan Vihar, Mansarovar, Jaipur, Rajasthan- 302020 ----Petitioner Versus Income Tax Officer Of Income Tax Department Ito Wd 1(1), New Central Revenue Building, Bhagwan Dass Road, Jaipur-302005 ----Respondent For Petitioner(s) : Mr. Sanjay Jhanwar, Senior Advocate assisted by Mr. Rajat Sharma, Mr. Shubhendra Singh & Mr. Saksham Pandey For Respondent(s) : Mr. Sandeep Pathak with Ms. Jaya P. Pathak & Mr. Palash Gupta HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA

Order 01/09/2025

1.

Mr. Pathak, who appears on advance copy, agrees with Mr. Jhanwar that one of the grounds raised certainly is covered by a judgment of this Court.

2.

Ground referred to is that the notice dated 27th June 2025 under Section 148 of the Income Tax Act, 1961 has been issued by a Juri ictional Assessing Officer (JAO) and not Faceless Assessing Offider (FAO) and this Court in the case of Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others1 following Sharda Devi Chhajer Vs. The Income Tax Officer & Another2 and Hexaware Technologies Ltd. Vs. 1 DB Civil Writ Petition No.10540/2024, dated 05.08.2025 at Jaipur Bench (unreported) 2 2025 SCCOnLine Raj 3386

[2025:RJ-JP:34962-DB] (2 of 2) [CW-13122/2025] Assistant Commissioner of Income-tax, Circle 15(1)(2)3, has held that such a notice will be bad and not valid.

3.

At the same time, Mr. Pathak states that in Hexaware Technologies Ltd. (supra), Revenue has preferred a Special Leave Petition and notice has been issued. Counsel states that in view of the law as it stands today, Court may grant the prayer of petitioner but in case the Apex Court interferes with judgment in Hexaware Technologies Ltd. (supra), Sharda Devi Chhajer (supra) or Shree Cement Limited (supra), then Revenue should be given liberty to revive the notice issued under Section 148 of the Act.

4.

Mr. Jhanwar states that in view of the above, for the present, petitioner will reserve its right to raise other grounds at an appropriate stage.

5.

Therefore, keeping open all rights and contentions of parties, we quash and set aside notice dated 27th June 2025 issued under Section 148 of the Act with liberty as prayed.

6.

Petition disposed.

7.

Consequently, all pending applications, if any, also stand disposed.

8.

In case, if any re-assessment order is passed, the same will also stand quashed and set aside. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ N.GANDHI/RAJAT/20 3 [2024] 162 taxmann.com 225 (Bombay)

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